Sentiment Extremes and Major Turning Points

A MAM (moving average momentum) major high or low signal is generated when sentiment momentum (as measured by the MMI daily signals) and market momentum reach extremes in the same direction.  Last Friday, the SPX cash index closed 1 point below what was needed to generate a major high signal.  Today, the market has another chance to do so, should it close > 4979 (SPX cash).  A signal today would mean that sentiment and market momentum have reached extremes together signaling that a major high is likely by February 12th. Should we get that we will begin watching for either a confirmation of "high likely in" or an invalidation of the signal.

Here's some history on the major high/low signal:

The latest MAM major low signal was for August 4-7, 2023.  The signal was invalidated on August 8.  The last cleanly confirmed MAM major low signal was for Mar. 3-Mar. 18, 2022, with the low on Mar. 8 followed by a 10% rally.  The major low signal following that, for Sept. 20 - 27, 2022 was invalidated on Sept. 29, implying more downside yet to come.  The market made a low on Sept. 30, bounced, and then made a lower low on Oct. 13.  It rallied 8% from there.  The last major high signal was on Nov. 11, 2023 and was invalidated on Nov. 14, 2023.  The last clear major high signal was for July 6-13, 2022.  The high on July 7, 2022 was followed by a smaller than usual 3% decline on the S&P 500.

Dr. Cari Bourette is an analyst at, where she provides her proprietary market mood analysis in our flagship service, "Avi's Market Alerts."